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September Bull and Baird Blog

September 4, 2013

Equities start the day flat which isn’t exactly confidence inspiring. You know what I hate? When people do this. I also hate that person at SBUX who takes forever at the milk/sugar station. Seriously, drop some milk in there, a packet of sugar, stir that bad boy up and MOVE ON. You aren’t baking a cake, there’s no need to measure out 1.5 tbsp of Splenda. You know what I hate the most though? When stocks don’t bounce after a huge selloff. We should’ve walked in the door to futures up 7 or 8, that’s what normally happens after a pounding. Instead we were nowhere at the open, but I guess all the big gurus are still debating mai tai vs pina colada instead of yield vs growth so I’ll try and contain my frustration. No incremental news overnight on this Syria thing, which apparently has been scheduled for Thursday (is this the most telegraphed attack since Pickett decided he would just go up the middle?). I swear, if they cut into the start of college football to show me a dark sky with tracers being fired into it I’m gonna complain about it on the internet. In a stern fashion I tell you! So yea, no real news to start the day, just a market struggling to find its footing amongst horrible sentiment and a pending incursion in the Middle East.

After the open we saw much less action than we did yesterday. Why is that? I’ll let this fantastic tweet from @jeffreykleintop do the talking: “Fed committed to Taper. White House committed to Syrian action. Congress committed to fiscal fight. Investors lacking commitment at all.” So while people were definitely lacking interest (for good reason) the market did piece together a small rally before lunch. 7 points in the S&P, which was the kind of move I was expecting overnight. Energy continued to roar as oil continued to soar (how can Katy Perry get away with ripping off Sarah Bareilles? Listen to the first 15 seconds of each of those songs and tell me they aren’t the same). The top 10 gainers were mostly related to Texas tea but GILD, HPQ, and NFLX crept onto the scoreboard. There was no joy at JOY as the stock led all losers falling 4.5%, breakfast at TIF must’ve been runny eggs because that one fell 4%, and LO smoked away some gains giving 2.5% to the market Gods. By lunch we sat near the highs, 1,640, as a classic oversold bounce stretched its legs into the afternoon. Where would you rank this on your all-time accomplishment list? Just behind that 32 on your ACTs? Just ahead of your first kid? Tough to know (I bet there are 368 people on this email that have never touched that toy or know what it is. Such a shame. Darn millenials. At least my fellow 30yr olds don’t spend our social time like this!!)

The last hour saw the market grind sideways and close at 1,635, up a whopping 4 points. So our big “let’s hope we get a relief rally after getting crushed” was all of 28bps. I have an ominous feeling about tomorrow (both from a military and a market perspective). We should’ve been up more today, I feel like Darth Vader is about to tell us he’s the next Fed Chairman.

Final Score: Dow +33bps, S&P500 +27bps, Nasdaq +41bps, Rus2k +30bps.

News Highlights:

Looks like it might be a bit early to call the correction over: While stocks are moving closer to “extreme oversold condition,” that doesn’t mean they will immediately bounce back. “In each of the prior corrections this year, we have seen an almost immediate V-shaped rally higher” after oversold conditions were reached,” he says. “If we do not get that this time, we could be in for a deeper, more meaningful pullback.”

Oversold…take a look for yourself. As of this morning, 33% of the stocks in the S&P are trading above their 50-days. This is still slightly above the low readings seen in this indicator back in November 2012 and June of this year.

We’ll end tonight with…well….with my successful attempt at disgusting you. I’m calling it right now, you will be disgusted. Period. End of story. (I can’t believe this is someone’s lunch).http://youtu.be/dxQmOR_QLfQ